Tenant Insurance vs. Tenant Protection Plans: Which Is Right for Your Self-Storage Facility?

Tenant Insurance vs. Tenant Protection Plans: Which Is Right for Your Self-Storage Facility?
Debunking Myths and Helping Operators Make Informed Choices

As a self-storage operator, you’re always looking for smart, effective ways to protect your business, serve your tenants, and increase your bottom line. One area that often raises questions is the choice between tenant insurance and tenant protection plans.

While tenant insurance has long been considered the standard, more and more operators are discovering that tenant protection plans offer stronger benefits with fewer obstacles. Unfortunately, there are still several myths surrounding protection plans that can lead to confusion or missed opportunities.

Let’s break down the top five myths and reveal why protection plans are becoming the go-to choice for self-storage operators across the country.

Myth #1: Insurance is the Only Legitimate Option

Some believe that because tenant insurance is regulated and structured as a traditional policy, it’s the only valid offering. But that’s simply not true.

Tenant protection plans are a fully legal and widely accepted alternative. Rather than a two-party insurance agreement between the tenant and an insurer, protection plans are a three-party agreement between the tenant, the facility, and the plan provider. These plans are backed by a Contractual Liability Insurance Policy (CLIP) from A-rated carriers like Chubb, ensuring professional-grade coverage.

Most importantly, protection plans don’t require operators to hold limited-lines licenses or comply with insurance training and commission regulations. That means less red tape and more flexibility.

Verdict: Protection plans are a legitimate, operator-friendly option.

Myth #2: Insurance Offers Better Coverage

At first glance, insurance may seem like the safer bet—but a closer look tells a different story.

Most tenant insurance policies pay out actual cash value (which factors in depreciation), include deductibles that can range from $500 to $1,000, and often exclude damages caused by facility negligence. This can leave tenants with uncovered losses and unexpected costs.

By contrast, tenant protection plans like TPP Secure™ typically cover full replacement costs, have zero deductibles, and include negligence-related claims such as roof leaks or security failures. Coverage for common perils like fire, theft, water damage, and even rodent damage is standard, with additional options available for regional risks such as wind or storm damage.

Verdict: Protection plans often offer broader, more practical coverage.

Myth #3: Protection Plans Increase Operator Liability

One of the most common concerns is that offering a protection plan could expose operators to unnecessary liability. However, this is based on a misunderstanding of how these plans work.

With a CLIP in place, the risk is transferred to the protection plan provider. In fact, TPP’s process is designed to keep operators out of the claims process entirely. Tenants file claims directly through a secure online portal, and TPP handles everything from there.

This structure actually minimizes liability for the facility while still ensuring tenants receive prompt, professional support.

Verdict: Protection plans reduce liability exposure, not increase it.

Myth #4: Tenants Trust Insurance More

While “insurance” is a familiar term, that doesn’t mean it’s what tenants prefer—especially when they understand their options.

Traditional insurance often comes with high deductibles, limited reimbursement amounts, and the risk of premium increases after a claim. It may also require coordination with an existing homeowner or renters' policy, which many tenants don’t want to navigate.

Protection plans, on the other hand, are simple. They’re offered at move-in as part of the lease, don’t require additional paperwork, and provide excellent value. Tenants can opt into coverage amounts that make sense for them, often between $2,000 and $5,000, for a low monthly fee.

Verdict: Tenants appreciate simplicity and value—protection plans deliver both.

Myth #5: Insurance Brings in More Revenue

Another common myth is that tenant insurance provides stronger revenue through commissions. However, commissions are often regulated and may only represent a small percentage of the premium.

Protection plans offer a far more lucrative structure. Operators can retain a larger portion of the monthly plan fee—often as much as 75 to 80 percent—because it's categorized as part of the rent. This means a mid-sized facility can generate tens of thousands of dollars in additional annual revenue while improving cap rates and overall valuation.

There are no licensing fees, no regulatory headaches, and no cap on earning potential.

Verdict: Protection plans unlock higher recurring revenue with less effort.

Why More Operators Are Choosing Protection Plans
Self-storage operators today need solutions that are simple, scalable, and tenant friendly. Protection plans meet those needs while offering better coverage, fewer administrative burdens, and more profitable outcomes.

From streamlining claims to increasing ancillary income, tenant protection plans are quickly becoming the smart choice for modern storage facilities.

Ready to Simplify Your Operations and Strengthen Your Revenue?
If you're looking for a proven way to improve tenant satisfaction and boost your bottom line, it's time to explore what Tenant Property Protection® can do for you.

Let’s talk about how our customizable protection plans can help your facility thrive.

📞 Call 1-877-575-7774
📧 Email [email protected]